The USDCAD pair which started to gain upward momentum last week is losing most of its gains from the past week as Canadian bulls are wrecking havoc since trading session began for the day. The USDCAD pair has moved down below the psychological support level of 1.2925 and is currently trading around 1.2921 price handle, the pair is expected to continue its bull run across Asian and European market hours before seeing any possible disruption during Canadian market hours. Canadian Prime Minister Justin Trudeau mentioned during his interview that “it’s ‘insulting and unacceptable’ that the U.S. has slapped tariffs on Canadian steel and aluminum citing security concerns”. He also mentioned that the relationship between US and Canada is taking a major turn. In response to Trump’s tariff Canadian govt responded with imposing tariff on aluminum, steel and consumer goods import from US. Trudeau ridiculed Trump’s decisions as it was US President Trump himself who mentioned that it would be a poor decision to include Canada in any action under Section 232’s national security rationale a year ago.
This trade war will hurt jobs and prosperity on both sides of the border, he added — and he wants Americans to understand that. From pizza and quiche to strawberry jam, ketchup and mustard, the Canadian tariff target list totals $16.6 billion. Analysts believe that this is the strongest trade action Canada has taken since World War II. On release font Canadian calendar has no major releases today while US market is scheduled to release durable goods and factory orders data.
Bank of Canada governor Poloz this weekend took back his statements made earlier last week as he said current development in trade wars has resulted in situation where future rate hikes by central bank is purely dependent on macro data outcome. Oil price continues to go down and US crude oil trade has been a major factor in play when it comes to recent disruptions. Investors focus on G7 summit for further development on Trade war proceedings and when Loonie is concerned investors focus on this week’s Ivey PMI, Employment data scheduled to release later this week on Canadian market and are on look out for further update regarding rate hike and clues on economic climate from Poloz’s speech this Thursday. Expected support and resistance for the pair are at 1.2878 / 1.2839 / 1.2795 and 1.2955 / 1.2985 / 1.3000 respectively.
This article was originally posted on FX Empire
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